City of Everett to give $400K to a nonprofit housing project

EVERETT — The Everett City Council has decided to allocate $400,000 to a nonprofit housing project. It is an unusual move.

The city expects to enter a contract with HopeWorks, an affiliate of Housing Hope. Negotiations of the terms will start in the weeks ahead, said Meghan Pembroke, a spokeswoman for the mayor’s office.

The vote, taken earlier this month, was unanimous.

HopeWorks operates a socially conscious set of businesses called Station I at 3331 Broadway. It wants to build Station II, an affordable housing and workforce training space, next door.

Everett, meanwhile, has been working with Catholic Housing Services to create low-barrier housing at 6107 Berkshire Drive near Evergreen Way.

The two projects ended up competing for funding. They hit a roadblock at the point when corporations can invest in affordable housing in exchange for tax credits. There wasn’t enough money there for both projects. HopeWorks gave up some of its tax credits, which helped low-barrier housing stay on schedule but widened the shortfall for Station II.

Generally, government cannot gift money to private organizations, according to the state Constitution. In this case, city attorneys said the allocation to HopeWorks falls under an exemption for helping “the poor and infirm.”

“It has been clearly complicated,” Mayor Ray Stephanson told the council at the Oct. 11 meeting.

The vote about the HopeWorks money was supposed to be part of a budget amendment that went before the council weeks earlier. Council members said they were caught off guard by the details, and the issue was tabled for further discussion.

Stephanson apologized Oct. 11. He said he should have done a better job keeping the council in the loop about his conversations with HopeWorks. Some council members said they should have been informed earlier about what sounded to them like financial negotiations.

No promises were made to HopeWorks, Stephanson said. Without the sharing of the tax-credits, the low-barrier project “would have been delayed by at least a year and potentially indefinitely,” he said.

The mayor said he was distracted by his enthusiasm for increasing supportive housing options in Everett.

“I wasn’t fair to all of you in not being more forthright,” he said.

The $400,000 had been set aside by the City Council for staffing at the low-barrier project, called Safe Streets. Catholic Housing Services needed a show of local support to secure other funding, city officials said. The money was budgeted for $200,000 a year for 2017 and 2018. The council was told more recently that staffing isn’t needed until 2019 because the apartments won’t be open yet.

Councilman Scott Murphy, the budget committee chairman, was who postponed the vote last month for extra discussion.

“I just want everyone to know this is not something that has been rushed through,” he said. “There has been a tremendous amount of due diligence and questioning and poking and prodding.”

The proposed transfer of funds drew criticism at the meeting from at least two residents.